Kent County Land Bank

The Kent County Land Bank Authority is an independent government entity created by the Kent County Commission under a state law passed in 2004.[1] The members of the board of directors are appointed by the County Commission, but the board only consists of other elected officials from Kent County and there are no independent, citizen committee members.

Traditionally, properties in Michigan are foreclosed when property taxes haven’t been paid by the owner for several years. When a county forecloses on the property, it is sold at auction to pay off the taxes owed. Historically, these public auctions have been open to individuals and entrepreneurs to purchase in a fair and public process that ensured that the county received the back taxes owed and, in most instances, provided additional funding beyond the amount owed. This represents revenue to the county of millions of dollars per year.

However, the Kent County Land Bank recently was granted the authority to cherry-pick properties and acquire them solely for the amount owed in taxes. This means that not only is the public auction process short-circuited, the county loses out on significant revenue — at a minimum hundreds of thousands of dollars. This year, over 40 properties were acquired by the Land Bank in a no-bid process where fair market value is not received by the county. In fact, the Land Bank chose to acquire many properties that have significant value.

This loss in revenue must be made up with other tax money, causing the county to shift spending from other essential services so that the losses caused by the Land Bank are covered.

Not only does this process cut out individual bidders and reduce revenue to the county, it also reduces future property tax revenue. Once the Land Bank re-sells the properties it acquires, it collects 50% of the property taxes due on those properties, reducing revenue for local schools and communities, in addition to filling the Land Bank’s coffers.

The Kent County Land Bank operates, according to its policies, on behalf of “government, non-profit, and for-profit entities” to acquire tax-foreclosed properties. One of the primary stated reasons for acquiring property is to “reduce blight.”[2] The problem is that the Land Bank picked many properties across the county with the sole reason of making money for itself. The properties are not blighted, but very valuable.[3]

As just one example, according to the list of properties the Land Bank is acquiring, we can examine 1030 Crosby Street NW in Grand Rapids. The property is listed as being in “immaculate condition.” You can view the home on Google Maps by clicking here.[4] This property was acquired by the Land Bank for less than $10,000. Its taxable value, according to the City of Grand Rapids web site, is over $41,000, meaning that its market value is more like $80,000. The Land Bank’s preferential transfer of this one property alone deprived the county of tens of thousands of dollars in revenue. This has nothing to do with improving a neighborhood because the property is already “immaculate.”

The Land Bank’s documents clearly show that properties are being acquired solely for the reason of “fund[ing] the land bank.” Reducing blight has nothing to do with it. These cherry-picked properties are chosen exclusively to provide the Land Bank and its bureaucrats with more money.

The politicians at the Land Bank have created for themselves an unaccountable new bureaucracy that is harming our county government and cutting small business owners out of the property market. The property auction process is no longer fair nor beneficial to county government. The Land Bank is now a central-planning agency that is picking economic winners and losers and engaging in real estate speculation at our expense.

This process is fundamentally unfair and bad government. The Land Bank, if it exists at all, should operate in a transparent process where it competes with other property buyers in a fair and open auction. Instead, the Land Bank is granted special government favors and permitted to make money for well-connected private developers on the backs of county taxpayers.

This must stop to restore fairness to the process and help our county maintain an important source of revenue.

The following county commissioners voted in favor of the latest special-interest Land Bank property transfer at prices that are far below market value:

• Ted Vonk
• Roger Morgan
• Gary Rolls
• Sandi Frost Parrish
• Stan Ponstein
• Jack Boelema
• Bill Hirsch
• Jim Saalfeld
• Harold Mast
• Carol Hennessy
• Dick Bulkowski
• Jim Talen
• Candace Chivas

The following county commissioners voted AGAINST the preferential Land Bank transfer and should be congratulated for their commitment to fairness and good government:

• Shana Shroll
• Michael Wawee
• Dan Koorndyk
• Harold Voorhees

1 http://www.accesskent.com/YourGovernment/BOC/commis_boards.htm

2 https://docs.google.com/open?id=0By88kvxf_PYrd3RQVGpoTjc3Vzg

3 http://bit.ly/MVxPuN

4 http://bit.ly/OdnBpb